The term bad debt is used to describe

Assessment: WAEC SSCE - Financial Accounting - 2002 (Objective) Subject: Financial Accounting

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The term bad debt is used to describe
Answer Details
The term bad debt is used to describe a debt that cannot be recovered. In other words, it is a debt that is unlikely to be paid by the debtor due to their financial situation, bankruptcy, or unwillingness to pay. When a company determines that a debt is bad, they will remove it from their accounts receivable and record it as a loss in their income statement. This helps to reflect the true financial position of the company and also reduces the amount of taxable income.
Read lesson note on Accounts Of Not-for-profit-making Organizations (JAMB)
Read lesson note on Nature And Significance Of Accounting (JAMB)
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